Drinker Biddle law firm starts up e-discovery subsidiary

Drinker Biddle & Reath has become the first Philadelphia-based law firm and one of the few nationally to form an e-discovery subsidiary to process data for clients.

The firm sees the growing field as a revenue stream that will allow it to handle the technology aspect of e-discovery even if the law firm’s e-discovery practice is conflicted out of handling the matter.

Drinker Discovery Solutions will be run out of Chicago and features software the firm purchased from Autonomy, an HP subsidiary that specializes in making business software. Thomas A. Lidbury, the leader of Drinker Biddle’s data management and discovery practice group and founder of Drinker Discovery, said the subsidiary will offer e-discovery support: processing paper and electronic data; performing culling techniques; hosting the culled documents for review in a Web-accessible platform; and producing documents in any format for clients.

Lidbury, who joined Drinker Biddle as a partner last year, has been working in the e-discovery world for 10 years. By buying the software, he said Drinker is essentially becoming an e-discovery vendor. The firm has also invested in technologists and hardware for the subsidiary.

“It’s a multimillion-dollar investment,” Lidbury said. “We hope to obtain enough clients in the next year or so where we can hopefully turn a profit and get a return on that investment.”

About six months in operation, Lidbury said Drinker Discovery has 50 cases, with most of the staff in Chicago and the server in Ohio. Lidbury said competition emanates largely from third-party vendors.

Most large law firms have e-discovery practices but use third-party vendors for software and some nonlawyer personnel needs. Like most relatively new concepts in the legal community, Drinker’s subsidiary was met with some skepticism.

“It’s a hard road to hoe,” Blair said. “There’s lots of price pressure, so that could be tough for a law firm to handle.”

Blair sees the trend moving toward law firms enhancing their e-discovery practices, where firms, rather than subsidiaries, offer legal advice on the data processed.

“Vendors do what the client wants,” Blair said. “Lawyers will tell you what the right thing to do is.”

Sharon Nelson is president of Sensei Enterprises Inc., a digital forensics firm in Fairfax, Va. She is also the president-elect of the Virginia Bar Association and author of the American Bar Association’s e-discovery handbook. She has some concerns about law firms being able to effectively construct a Chinese Wall that separates the firm from the subsidiary.

“I’m not saying you can’t,” Nelson said. “But there are a lot of people who are skeptical about whether a subsidiary can keep information in-house, especially if that information could benefit the law firm.”

David Ries, a Pittburgh partner for Thorp Reed & Armstrong, has written an e-discovery handbook for the Pennsylvania Bar Association. He can see why a firm might feel it could create new business from a tech-based subsidiary, though he noted that several big firms have tried and failed to establish such entities.

“Maybe Drinker Biddle has thought of an approach that others have not to deal with that [conflict] issue,” Ries said. “And if so, that could be something other firms adopt.”

Lidbury said there are probably four or five other law firms with similar e-discovery subsidiaries. He believes Drinker Biddle will be able to separate the legal work for clients from the technical work done by Drinker Discovery. He said creating the subsidiary allows Drinker Discovery to serve as nationwide service provider to large companies that might be conflicted out of using Drinker Biddle for legal work.

Lidbury said the law firm and subsidiary will operate separately, but he can still offer clients one-stop pricing for legal services and data processing rather than using an outside vendor for part of it.